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2021 DIGILAW 156 (MP)

Sumer Galaxyia Private Limited v. Union of India

2021-02-15

ANAND PATHAK, SHEEL NAGU

body2021
JUDGMENT : Anand Pathak, J. 1. The present petition is preferred under Article 226 of Constitution of India, seeking following reliefs: "i. Direct the respondents to abstain from continuing with the valuation proceedings under Section 142 A and/or ii. Declare the valuation proceedings under Section 142 A as null and void and/or iii. That the cost of litigation be awarded to the petitioner." 2. Precisely stated facts of the case are that Income Tax Officer -3(2), Gwalior as Assessing Officer directed the District Valuation Officer, Income Tax, Bhopal vide letter dated 25-10-2017 for valuation of property with the nomenclature "The Legacy" a multi-flour apartment situate at Airport Road, Gole Ka Mandir, Bhind Road, Gwalior and in pursuance thereof, notice dated 30-10-2017 (Annexure P/4) purportedly under Section 142A of Income Tax Act, 1961 (hereinafter referred to as "the Act of 1961") was issued by Valuation Officer to the petitioner for providing details as referred in the said notice. It appears that Assessing Officer during this period proceeded with assessment of the petitioner company and vide order dated 29-12-2017 (Annexure P/6) passed assessment order and assessed the income as Rs. 6,03,00,000/-. 3. Petitioner/assessee challenged the said assessment order before the appellate authority {Commissioner (Income Tax) Appeals} and the said appeal is still pending. Meanwhile vide notice dated 19-10-2020 (Annexure P/8), the District Valuation Officer, Income Tax, Bhopal issued notice to the petitioner/assessee regarding assessment and valuation of the above-mentioned property and directed the petitioner to cooperate in inspection of the same for valuation purpose and this is the bone of contention in the petition and being crestfallen by the said issuance of notice, this petition has been preferred. 4. It is the submission of learned counsel for the petitioner that Section 142A contemplates estimation of value of assets by Valuation Officer for which the Assessing Officer may for the purposes of assessment or reassessment, make a reference to a Valuation Officer to estimate the value including fair market value of any asset, property or investment and submit a copy of report to him. The Valuation Officer shall estimate the value of the asset, property or investment after taking into account such evidence or even best judgment estimation, in case of non cooperation of assessee and shall submit copy of report of assessment to the Assessing Officer within a period of 6 months from the end of the month in which reference is made under sub-sections of Section 142A of the Act of 1961. Here, notice issued by Assessing Officer to Valuation Officer for completion of valuation on 25-10-2017, therefore, submission of report ought to had been within six months, but no such valuation report was prepared by the District Valuation Officer within time stipulated and not only assessment has been carried out by the Assessing Officer and the appeal has been filed, but pending consideration; at the instance of appellate authority; fresh notice on 19-10-2020 (Annexure P/8) has been issued which is contrary to the mandate of statute as reflected under Section 142A. Same is time barred and cannot be taken into consideration. 5. Per contra, learned counsel for the respondents opposed the prayer and submitted that even after notice under Section 142A of the Act of 1961 is issued for valuation of actual investment made by the assessee and if assessment is carried out by passing assessment order and if the said assessment order is under challenge in appeal then it is well within the power of appellate authority (Commissioner Appeals) whereby he can call valuation report for his satisfaction and therefore, vide letter dated 20-03-2018 (Annexure R/2), Commissioner (Appeals), Gwalior wrote concerned Income Tax Officer, Gwalior to offer his comments and to expedite the process of valuation of the property. In pursuance thereof, District Valuation Officer has issued notice to the petitioner on 19-10-2020 vide Annexure P/8. No illegality has been caused because it is well within the jurisdiction of Commissioner (Appeals). He prayed for dismissal of petition. 6. Heard learned counsel for the parties and perused the record. 7. In the case in hand petitioner is harping over the point of limitation as contemplated in Section 142 A (6) of the Act of 1961 wherein six months period has been prescribed for Valuation Officer to submit valuation report to the Assessing Officer. 6. Heard learned counsel for the parties and perused the record. 7. In the case in hand petitioner is harping over the point of limitation as contemplated in Section 142 A (6) of the Act of 1961 wherein six months period has been prescribed for Valuation Officer to submit valuation report to the Assessing Officer. Here, in the case in hand, Assessing Officer sought valuation report vide letter dated 25-10-2017 from District Valuation Officer but since matter pertains to assessment year of 2015-16, thus, he had to complete the assessment by December, 2017, therefore, he proceeded with the assessment on the basis of Income Tax Returns filed by the assessee and passed assessment order dated 29-12-2017 (vide Annexure P/6). Challenging the said assessment, appeal is pending at the instance of assessee before the Commissioner (Appeals). 8. Section 250 of the Act of 1961 prescribes Procedure in Appeal which is reproduced for ready reference: "250. Procedure in appeal.-(1) The Commissioner (Appeals) shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and to the Assessing Officer against whose order the appeal is preferred. (2) The following shall have the right to be heard at the hearing of the appeal- (a) the appellant, either in person or by an authorised representative; (b) the Assessing Officer, either in person or by a representative. (3) The Commissioner (Appeals) shall have the power to adjourn the hearing of the appeal from time to time. (4) The Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals). (5) The Commissioner (Appeals) may, at the hearing of an appeal, allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if the Commissioner (Appeals) is satisfied that the omission of that ground from the form of appeal was not willful or unreasonable. (6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. (6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. (6A) In every appeal, the Commissioner (Appeals), where it is possible, may hear and decide such appeal within a period of one year from the end of the financial year in which such appeal is filed before him under sub-section (1) of section 246A. (7) On the disposal of the appeal, the Commissioner (Appeals) shall communicate the order passed by him to the assessee and to the Chief Commissioner or Commissioner." 9. Similarly powers of Commissioner (Appeals) are being provided in Section 251 of the Act of 1961 which is also reproduced for ready reference: "251. Powers of the Commissioner (Appeals).- (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers- (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. (2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation.-In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant." 10. Explanation.-In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant." 10. Perusal of Sections 250 and 251 of the Act of 1961 reveals that Section 250(4) and (5) are having wide power to make such further enquiry as Commissioner thinks fit or may direct the Assessing Officer to further enquire and report the result of the same to him. Not only this, Section 250(5) of the Act of 1961 enlarges the scope of hearing of appeal because Commissioner may allow the appellant to go into any ground of appeal not specified in the grounds of appeal, if Commissioner is satisfied that omission of that ground from the form of appeal was not willful or unreasonable. Somehow similar spirit is echoed in Explanation of sub-section (2) of Section 251 of the Act of 1961, therefore, wide powers are available to the Commissioner (Appeals) as appellate authority. 11. Exercising such power, Commissioner (Appeals) directed the Assessing Officer to obtain valuation report vide letter dated 20-03-2018 (Annexure R/2). In pursuance thereof, District Valuation Officer has issued the notice which is the bone of contention in the matter. When appeal is pending consideration before Commissioner (Appeals) and appellate authority has wide powers to look into the dispute as referred above then assessee/petitioner is always at liberty to raise this ground also in appeal even if the petitioner has not raised the same so far, in the appeal memo about limitation as provided under Section 142A of the Act of 1961. This Court does not intend to venture into the arena to preempt the controversy. 12. Commissioner (Appeals) shall take into consideration the plea of limitation as raised by the petitioner in the case in hand as one of the grounds of appeal as expeditiously as possible preferably within three months from the date of receipt of certified copy of this order and pass an appropriate order taking into consideration the interplay of different provisions of the Act of 1961 in accordance with law and shall decide this point at the first instance, if not already decided. No further indulgence can be shown except to issue above-mentioned directions. 13. Petition stands disposed off in above terms.